Lavish parties donors' way of avoiding 2002 law

Lavish parties are new way of gaining accessEvent sponsors use entertainment to avoid 2002 law, still raise the cash

ANJALI ATHAVALEY, Copyright 2004 Houston Chronicle

Published
5:30 am CDT, Tuesday, July 27, 2004

A 2002 law curbed the flow of corporate donations to political parties, but it can't stop the flow of champagne.

Private donors are making record-high contributions and throwing an impressive number of parties at this year's Democratic and Republican conventions. Research groups say the extra lavishness results from a loophole in a 2002 ban on virtually unlimited donations by corporations, unions and individuals to political parties.

As a way around the ban, named McCain-Feingold in honor of its bipartisan Senate sponsors, businesses and other private donors are channeling large sums of money through the conventions' host committees, the massive, glittery welcome-to-town operations in Boston and New York.

When all the checks are counted, private concerns will have contributed a total of $115 million to the host committees, according to the Campaign Finance Institute, a nonpartisan research institute in Washington.

At least $64 million is going to the New York committee hosting the in-power Republicans next month; at least $39.5 million to the Boston committee coddling the Democrats, according to the institute.

CFI's projection of a total of $115 million dwarfs the $56 million that private donors gave to host committees in 2000, in the pre-McCain-Feingold age.

Taxpayers still contribute

Taxpayers still are contributing to the funding. Each party got about $15 million from the government to conduct their conventions.

Among private donors this year, more than half are based in Boston or New York. But the list includes a few Texas companies, such as Houston-based Waste Management Inc., San Antonio-based Clear Channel Communications and Dallas's Affiliated Computer Services.

Clear Channel contributed at least $100,000 to the Boston host committee, according to the CFI. The New York host committee did not disclose donation amounts, a CFI official said.

"We view our support of the host committees, as an outgrowth of the services we already provide in both Boston and New York," said Heather Browne, spokeswoman for Waste Management, which operates in both cities.

Likewise, other businesses say they are donating money for goodwill. But watchdogs in Washington claim a hidden reward validates those efforts: a chance to schmooze the most influential party leaders while they attend extravagant events that occur only during a presidential election year.

"What is the convention? It's the elite of the party. It's like getting access to the floor of Congress," said Steven Weissman, associate director for policy at CFI.

On the list of New York host committee donors is Hearst Corp., which owns the Houston Chronicle. The company says it is donating money because it's based in New York, and that it is not sponsoring any parties at the convention.

Committees exempt

The
Federal Election Commission
ruled last year that gifts to host committees are exempt from the soft money ban because they help promote the host city's economy. Host committees are not required to release donor lists and amounts until 60 days after the convention.

Companies also throw their own large-scale bashes, which analysts say buy more "face time" with lawmakers. Since these are not official parties put on by the host committees, they are not required to be reported as contributions.

Sponsors include technology and weapons company Raytheon, the pharmaceutical company Bristol-Myers Squibb and the AFL-CIO labor organization, according to the Center for Public Integrity, a nonpartisan research group.

Conoco-Phillips hosted the Texas delegation to the Democratic convention at a Sunday evening party overlooking Boston Harbor.

Company Vice President Don Duncan said Conoco-Phillips hosts such parties because it has many customers in Texas and supports the two-party system. "It's also a good image for the company," he said.

Later Sunday night, U.S. Rep. Sheila Jackson Lee, D-Houston, threw a party for the Texas delegation, sponsored by Global Energy Inc. And the utility company TXU sponsored the delegation's breakfast Monday with roughly $10,000, according to Curt Seidlits, senior vice president for government affairs.

Seidlits said TXU considers the delegates its constituents and that the company will treat Texas Republicans in kind next month.

"The bottom line is, they are our elected officials," he said. "These are people who develop public policy ... we want to be a part of that process."

Stake in legislation

TXU is among power companies that have a financial interest in state and federal legislation on pollution from older power plants.

Political parties make note of who donates the money and throws the private blowouts, said Larry Noble, executive director of the Center for Responsive Politics, a nonpartisan research group in Washington.

"When the lobbyist knocks on the door later on, you can be sure they have access," said Noble, a former general counsel of the Federal Election Commission.

Meeting lawmakers at the convention may help a business with legal issues it faces, such as deregulation of the telecommunications industry or tort reform, he said.

Businesses and trade associations involved with the conventions dismiss the idea.